Previous research has shown that an illusory correlation--the perception of an association between two variables that does not exist in the information on which observers' judgments are based--can be based on the co-occurrence of distinctive stimuli, and that this information processing bias can result in the differential perception of social groups. This research program traces the development and consequences of stereotypic beliefs established through this illusory correlation bias. The research investigates the effect of this bias on how people process and interpret subsequent information about group members, evaluate the products of group members, and behave toward group members. Mechanisms for preventing and undermining the stereotypic beliefs formed from illusory correlations are also investigated. The research will be informative about a process by which stereotypic conceptions of groups can develop and the consequences of holding such beliefs on information processing and interpersonal behavior.